Gain control of your finances

It is time to gain control of your finances. Life is way too short to continue living from paycheck to paycheck. Here are some sure-fired ways to gain control of your finances.

Stop blaming circumstances, other people, or your spouse

Sit down (with your spouse if married) and list all of you bills on paper. For each debt (i.e. student loan, car, house, etc.), list the name of the creditor, the total amount owed, and the monthly payment. For each monthly bill (i.e. electricity, phone, etc.), list the company and the current monthly payment owed.

List all of your monthly payments due THIS MONTH in one column. Total up the monthly payments.

List all of your other money needs this month (groceries, gasoline, baby gifts, stamps, dining out, blow-it money, vacation savings, emergency fund savings) in another column and total them up.

List all of your income for THIS MONTH in another column. Total up the income for the month.

Complete this formula:

TOTAL INCOME – MONTHLY BILLS – ALL OTHER MONEY NEEDS = ZERO

The total of this equation must equal ZERO. If it is a POSITIVE number, it means that you have not given each dollar of income a name. You have not assigned all of your income to a category. This cannot happen. Money that is not given a name will leave you. Here is a good place to put extra money – debt reduction or emergency fund savings!

If the total of this equation is NEGATIVE, it means that you are OVERSPENDING your income. This cannot happen. You will empty your savings or turn to debt to cover the negative amount. You will not win if this happens. Instead, go back through your monthly spending and reduce it to cover the gap. You can also boost income if you have overtime or a 2nd job as an option. Either way, this must balance to zero. You will not win otherwise.